Milk consumption in Brazil follows weak and producer faces price drop

Milk consumption in Brazil follows weakened, with falling imports and low prices paid to producers, says Rabobank in quarterly report on the sector. The Bank says that milk production in the country began to slow down in the first quarter of this year, after an increase of 2% in the last months of 2017.
High grain prices and the fall of the price paid to the producer restricted the banks of ranchers and even if payment for the litre of milk can make progress in the coming months, should still remain below the historical average. "In this scenario, the production can grow less, about 1% in the first quarter of the year," says the Rabobank. Domestic demand is also limited. Despite the improving economic scenario of the country, unemployment is still high, and this compromises the purchasing power of the population. The import is also smaller and retreated 43% in the first two months of the year, compared with the same period in 2017.
The rest of the world, Rabobank says that strong demand with a robust program of import, and the offer of New Zealand compromised by adverse weather conditions supported milk prices in the first quarter of 2018.
The Bank considers that the climatic risk in New Zealand, the main dairy producer in the world, have decreased now. At the same time, the peak of the harvest in the northern hemisphere what happens during the second quarter of the year should press the quotes.